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How UPS Works

The Business of UPS

UPS started out in 1907 in Seattle, Washington, as American Messenger Company. Its founder, Jim Casey, borrowed $100 from a friend to start a package delivery business. Casey delivered packages by bicycle and on foot.

The company's name changed to UPS in 1919, when it expanded its operations into Oakland, California. UPS unveiled an air express delivery service in 1929, but next-day air delivery didn't arrive until 1982.

Alice and Trixie arrive safely
Image © Copyright 2003 United Parcel Service of America, Inc. All rights reserved. In addition to standard boxes and envelopes, UPS delivers unique packages, including live whale sharks to
Georgia Aquarium.

UPS has been a publicly traded company since 1999. In 2005, it reported $42.6 billion in revenue. It has partnered with businesses like Amazon and eBay to provide shipping options to customers. The company also has multiple retail locations where customers can do things like drop off packages, rent mailboxes make photocopies. These locations include:

  • 4,400 UPS Stores
  • 1,300 Mail Boxes Etc. stores
  • 100 UPS Customer Centers
  • 17,000 authorized outlets

Customers also view 18.5 million pages and make about 10 million package tracking requests at every day.

But picking up and delivering package is not all that UPS does. It carries mail and packages for one customer that most people would think of as a competitor - the United States Postal Service. In addition, UPS Supply Chain Solutions oversees some surprising jobs for other companies. Basically, UPS takes care of warehousing, shipping, delivery, logistics, repair and customs brokerage for businesses. It also offers consulting services to businesses to help them refine their warehousing, shipping and logistics practices.

A UPS employee uses a scanner
Image © Copyright 2003 United Parcel Service of America, Inc. All rights reserved.
A UPS employee uses a scanner in a Supply Chain
Solutions warehouse.

One such company is Toshiba. If you buy a Toshiba laptop and it breaks, UPS will:

  • Send you a return-shipping box that your laptop will fit in
  • Repair the laptop
  • Ship it back to you
In other words, everyone who handles your laptop works for UPS, not Toshiba.

UPS is also in charge for inventory and shipping for several other companies, including Rolls-Royce. Some companies don't publicize their relationship with UPS, but if you order underwear from Jockey or a baseball bat from Louisville Slugger, your purchase will come straight from UPS rather than the company you ordered from.

The UPS Culture
As a company, UPS focuses its attention on:

  • Safety: The company spends $38 million a year on safety training, which covers everything from proper body mechanics at work to proper nutrition and exercise at home. As a result, UPS has lowered the number of workdays lost due to injury by more than 50 percent since 1995.

  • Employee education: Many UPS employees at Worldport and other sorting locations are college students. UPS encourages mentors and recruiters from nearby colleges to visit and work with its employees, and it provides additional benefits and perks for college students.

    Supervisors discuss operations above the small sort area in the facility's North Core
    Image © Copyright 2003 United Parcel Service of America, Inc. All rights reserved.
    Supervisors discuss operations above the small sort area in the facility's North Core. Many employees working at the UPS Worldport are participants in the Metropolitan College program.

  • Diversity: Minorities make up 35 percent of UPS' U.S. employees and 30 percent of its executives. It's also recognized by Fortune magazine as one of the 50 best companies for minorities

  • The Environment: Delivering packages all over the world and moving them between distribution centers requires an enormous amount of fuel. UPS uses several methods to reduce its fuel consumption and its environmental impact. For example, it has developed a hydraulic hybrid package car, and its drivers use route-planning software to minimize the amount of time they spend idling in traffic and making left turns. UPS pilots also fly at the most fuel-efficient speeds possible to meet their delivery deadlines and run only one engine when taxiing to conserve fuel.

UPS has also established the UPS Foundation, which provides grant funding to nonprofit organizations, particularly those that focus on literacy, hunger and volunteerism.

Hydraulic hybrid package car
Image © Copyright 2003 United Parcel Service of America, Inc. All rights reserved.
The UPS hydraulic hybrid package car

UPS has also at times been the target of less glowing publicity. In July of 2006, for example, UPS and competitor FedEx received subpoenas in a price-fixing probe. The company has also experienced several labor disputes, including a 15-day strike in 1997. UPS and its pilots also announced a tentative labor agreement in July of 2006 after four years of negotiations, which nearly led to a strike.

You can learn more about UPS's financial information and daily operations at the UPS Web site. To learn more about related topics, check out the links on the next page.

Related HowStuffWorks Articles

More Great Links


  • "Aggressive Initiatives Save Fuel at UPS Airlines." UPS, October 27, 2005.,2300,4621,00.html
  • Caldwell, Melinda. "Safety: It's a Package Deal." Plant Services, July 2003.
  • Dade, Corey. "UPS, Postal Service Set Delivery Pact." Wall Street Journal, June 28, 2006.
  • Dade, Corey. "UPS, Pilots Reach Tentative Accord After Long Talks." Wall Street Journal, July 1, 2006.
  • "Expansion at Main Air Hub will Cost at Least $1 Billion." Wall Street Journal, May 18, 2006.
  • Foust, Dean. "Big Brown's New Bag." BusinessWeek, July 19, 2004.
  • "Fuel Conservation No Idle Matter at UPS." Multichannel Mart.
  • Hammer, David. "New Hydraulic Hybrid Trucks Roll Off." Forbes, June 21, 2006
  • Hintch, Betty. "Safety at UPS: True Employee Involvement." Compliance Magazine.
  • McPhee, John. "Out in the Sort." The New Yorker. April 18, 2005.
  • "Package Flow Technologies: Innovations at Work."UPS: Fact Sheets.,2305,1134,00.html
  • Sekula, Robyn Davis. "Inside Worldport." The Lane Report, November 2005.
  • Strauss, Gary. "UPS' Pay, Perks Make it a Destination Job for Many." USA Today, October 14, 2003.
  • Thomas, Owen. "What Silicon Valley Can Learn from UPS." CNN Money, February 23, 2006.
  • UPS Small Package Services Fact Sheet,2305,780,00.html
  • UPS: Technology Facts
  • UPS: Worldwide Facts